What Is The Ownership Structure Like For Starwood Property Trust, Inc. (NYSE:STWD)?

By
Simply Wall St
Published
September 29, 2020
NYSE:STWD

A look at the shareholders of Starwood Property Trust, Inc. (NYSE:STWD) can tell us which group is most powerful. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. Companies that used to be publicly owned tend to have lower insider ownership.

Starwood Property Trust is a pretty big company. It has a market capitalization of US$4.5b. Normally institutions would own a significant portion of a company this size. In the chart below, we can see that institutions own shares in the company. Let's delve deeper into each type of owner, to discover more about Starwood Property Trust.

View our latest analysis for Starwood Property Trust

ownership-breakdown
NYSE:STWD Ownership Breakdown September 29th 2020

What Does The Institutional Ownership Tell Us About Starwood Property Trust?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in Starwood Property Trust. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Starwood Property Trust's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
NYSE:STWD Earnings and Revenue Growth September 29th 2020

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. We note that hedge funds don't have a meaningful investment in Starwood Property Trust. Our data shows that The Vanguard Group, Inc. is the largest shareholder with 8.5% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 6.1% and 3.3%, of the shares outstanding, respectively. Barry Sternlicht, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Starwood Property Trust

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own some shares in Starwood Property Trust, Inc.. This is a big company, so it is good to see this level of alignment. Insiders own US$175m worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public holds a 41% stake in Starwood Property Trust. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Starwood Property Trust better, we need to consider many other factors. Be aware that Starwood Property Trust is showing 3 warning signs in our investment analysis , and 2 of those are concerning...

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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